More postsecondary funds go to individuals
Millennium foundation cites "dramatic" change in the past decade
by Peggy Berkowitz
Total spending on higher education by all levels of government has increased over the past decade, but a "more dramatic" change is how governments are spending the money, says the Millennium Scholarship Foundation of Canada. In a new report, it says an ever-growing share of government funding is going to individuals and a diminishing proportion to institutions.
Canada is moving towards "a more Americanized approach" of giving more money to individuals to choose where they want to study, said Sean Junor, senior policy and research officer with the Millennium Foundation and co-author of the report, The Price of Knowledge.
Before 1994, universities and colleges received about 87 percent of all transfers related to postsecondary education but then the balance began to shift. By 2002, transfers to institutions accounted for just 78 percent of the total.
"Individuals - students and their families - vote," said Mr. Junor. "Institutions can be vocal in calling for change to the system, but individuals are the ones the elected officials are more concerned about."
The 2004 edition of The Price of Knowledge, on multiple aspects of access to postsecondary education and student finance, is twice as long, at 400 pages, and offers deeper analysis than the first edition that came out in 2002. There's much more research available now, especially by Statistics Canada and the foundation itself, explained Mr. Junor. "The costs are increasing for students and families, and as a result people want to have the best information available."
One chapter of the report compares spending by all levels of government over the 12-year period 1990-2002. Overall spending is up 20 percent, to about $18.6 billion in 2002. What grew most quickly were transfers to individuals. The report defines spending on individuals as student financial assistance (loans, grants and remission), tax expenditures, Canadian Education Savings Grants and student-employment subsidies (employment subsidies are excluded from the analysis because complete data wasn't available).
Over the past decade, transfers to individuals roughly doubled in real dollars, from some $2 billion to $4 billion a year. Nearly the entire increase was due to changes at the federal level, with more than half of the increase tied to growth in tax credits or other tax-based spending.
For institutional spending, the report includes operating expenses, capital budgets, and sponsored research at colleges, universities and vocational schools. Canadian data isn't good enough yet to separate the different spending categories such as instruction, research or capital. However, the report notes that the recent emphasis on research spending at Canadian universities and the burst of capital spending in Ontario to accommodate the double cohort means that what looks like "constant spending" might "mask real and perhaps serious declines" in funding for teaching.
"We're not necessarily in a crisis at this point but we do need to think about the quality of the education that's offered," said Mr. Junor. "That starts with a renewed commitment to faculty, really going back to the core operating [grant] for universities."
The report also examines transfers based on two important, commonly used measures: per-student expenditures and expenditures as a percentage of Gross Domestic Product (see chart on previous page). Per-student spending fell to its lowest point, $8,950, in 1996, before a large spending increase in 1999 and the next two years brought per-student spending to a high of $11,662 in 2001. But spending didn't keep up with growing enrolment, and per-student spending fell six percent to $10,926 in 2002.
The picture differs for GDP. Precisely when PSE expenditures were falling, Canada recorded some of its highest real growth rates in the post-war period. As a result, government transfers as a proportion of GDP went from a high of 1.8 percent in 1992 to a low of 1.35 percent in 1998, before rising slightly to 1.49 percent in 2002 - a level still 17-percent lower than a decade earlier.
The Millennium Scholarship Foundation was established in 1999 by the federal government to deliver financial assistance to students and do research on student aid and access to postsecondary education.
